As the Consulting CFO and CPA to over 70 venture backed startups, the most common question I get asked every January is, “What do we need to do about taxes? What about this Delaware Annual Filing? And SF Payroll Tax Expense?” So about this time every year I send out a customized road map to all of my clients that details everything they can expect for the coming year. I wanted to share this “cheat sheet” with you, but keep in mind that this is just a “cheat sheet.” Please reach out to me or your local CPA about tax filings that are specific to your business…because every startup is unique!
The dates provided below apply to San Francisco based, Delaware C-Corporations with fiscal years ending 12/31, which is the most common type of legal structure that I encounter.
Feb 2: This date is crucial for any business that pays employees or contractors. You must file a W-2 form for every employee. If you make payments to nonemployees, such as contractors, prepare a separate 1099-MISC for each one. The due date for mailing forms to employees or contractors is normally the last day in January, which falls on a Saturday this year, thus the Feb. 2 deadline.
Feb 28: If you had more than $150,000 in San Francisco payroll last year, you will need to file a SF Payroll Tax Return by Feb. 28. Expect to pay a 1.5% tax if your gross payroll was over $260,000 in 2014. You’ll need to pay this tax regardless of whether or not you were profitable. Be sure to plan for this; that 1.5% tax looks tiny but often amounts to thousands of dollars. If you made installments last year you’ll only need to make the final quarterly installment and file the payroll tax return by Feb. 28.
March 1: Your Delaware franchise tax comes due. The amount you owe varies based on your balance sheet or the amount of stock issued and outstanding at year-end. Start-ups backed by venture capital with $3 million in the bank can expect to pay about $2,500. Seed backed start-ups may just pay the minimum, which is $175.
March 2: Remember those W-2 and 1099 forms you provided to employees and contractors a month ago? By March 2, you must submit this information to the government. Send your W-2 data, accompanied by Form W-3, to the Social Security Administration. If you file a 1099, send a Form 1096 along with it to the IRS. This deadline is normally the last day of February, which falls on a Saturday this year.
March 15: Forget about April – your federal corporate income taxes come due a month before personal income taxes. If you’re not prepared to file on time, don’t worry, you can extend the deadline until Sept. 15. Unfortunately, while you may delay filing, the extension doesn’t give you extra time to pay the taxes.
April 1: File your 571-L SF Business Property Tax Return if you a) received the 571-L form in the mail from the Assessors Office, or b) you have taxable business property with a total cost of $100,000 or more. Taxable business property can include computers, office furniture, and equipment. In general, it doesn’t include business inventory, intangible assets or application software.
April 15: As individuals nationwide file their personal income taxes, you also have some tax business to conduct. This blog is aimed mainly at California start-ups, who have to pay the state’s franchise tax by April 15. Most C-Corps, S-Corps, and LLCs will need to pay an annual tax of $800. Your first quarterly estimated federal income-tax payment is also due on April 15.
Apr 30: SF Payroll Tax Quarterly Installment due (1.35% of Q12015 gross payroll if 2015 payroll is over 260K)
May 31: File your SF Business Registration Renewal.
July 31: SF Payroll Tax Quarterly Installment due (1.35% of Q22015 gross payroll if 2015 payroll is over 260K)
Oct 31: SF Payroll Tax Quarterly Installment due (1.35% of Q32015 gross payroll if 2015 payroll is over 260K)
Rolling: Most corporations in California file a Statement of Information every year. Fortunately, this one doesn’t require you to track a deadline. You’ll receive a white postcard in your mailbox when it’s time to file. If you made the wise decision to hire Kruze Consulting to handle your accounting, just forward the postcard to me and I’ll take care of it.
It’s hard enough to conquer the world as a startup without having to fight the taxing agencies too. Add these dates to your calendar, and if you have any questions feel free to reach out to me. I’m here to help.
Kruze Consulting is a leading accounting firm working with seed and venture funded Delaware C-Corps. Funded startups choose Kruze Consulting’s team of CPAs, bookkeepers, CFOs, former IRS tax auditors, and venture experts. In addition to running the books, Kruze does tax, finance, and HR. Contact Kruze today!
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